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Media organisations should offer financial assistance for the poorest of journalist interns, a new Government report has said.

The Unleashing Aspirations report published today recommended companies should provide grants and loans for interns from less well off social backgrounds who at present are excluded from unpaid internships because of costs.

The Panel on Fair Access to Professions, chaired by Alan Milburn, also recommended establishing a code of best practice and a Kitemark award scheme to create a universal high standard for internships.

The code of best practice would include openly advertised placements, a transparent recruitment process and guidance on remuneration. The Kitemark would be awarded following an external and independent assessment.

The journalism industry is highlighted in the report as failing to meet acceptable standards of internships, most significantly in its use of interns as a low cost replacement for more expensive full-time staff.

The NUJ told the panel that 50 per cent of new journalists polled had undertaken post-qualification work experience, with over three-quarters working unpaid. A quarter of the 640 graduates surveyed said the organisation they worked for could not function normally without interns.

Journalism comes in for specific criticisms for its poor recruitment from the working classes. The NUJ told the panel that a Journalism Training Forum poll in 2002 revealed that under 10 per cent of new entrants to journalism came from a working class background and just three per cent came from homes headed by semi-skilled or unskilled workers.

Unleashing Aspiration also indicates that journalism is a victim of "qualification inflation".

One of the biggest challenges to broadening diversity in the profession is posed by the fact that 98 per cent of entrants are educated to degree standard or higher, the report states. Only a small minority of journalists now work their way up through non-graduate, vocational working class backgrounds.

The proposals were welcomed by the NUJ as a "positive first step in challenging exploitative unpaid work experience placements".

NUJ general secretary Jeremy Dear said: "This report shows how the use of unpaid internships has undermined the diversity of our profession.

"It is good to see the government recognising the problem and we are now looking for swift action to ensure the financial barriers to entering journalism are lowered."

He added: "Genuine work experience is vital to anyone coming in to the profession, but all too often these placements are of very low quality.

"Too many employers see internships as a way of getting work done for free, without any thought towards their responsibilities to provide would-be journalists with a learning opportunity."

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